by Professor Steve Fothergill (CRESR)
On 3 November the UK government announced a list of 477 successful bids into its new Community Renewal Fund (CRF). The fund supports investment in skills, local businesses, communities and place. The winners across England, Scotland, Wales and Northern Ireland will share a total of £203m, all to be spent by the end of June 2022.
In public expenditure terms the CRF is modest but it is supposed to prepare the way for the UK Shared Prosperity Fund (UK SPF), intended to replace EU funding and be worth on average £1.5bn a year. So does the CRF set a good precedent for the UK SPF?
Have each of the four nations been treated fairly?
Probably, assuming previous EU funding is the yardstick. The distribution of CRF awards between the four nations of the UK is as follows:
England – 62%
Scotland – 9%
Wales – 23%
N Ireland – 6%
This matches the division of EU funding between the four nations in the 2014-20 spending round. The documentation issued by the government explains that this was a ministerial decision. The Spending Review on 27 October confirmed that the UK SPF will at a minimum match the size of EU funds to each nation so the allocation of CRF funding mirrors this commitment.
On a per capita basis Wales receives substantially more than other parts of the UK, which was the case with EU funding.
Is the allocation of funding to the English regions also fair?
No. The successful CRF bids allocate money to projects submitted by county councils, combined authorities, and (elsewhere) unitary authorities. Adding up the awards to the regional level, and comparing the figures with the regional distribution of EU funding, reveals an alarming picture:
% share of English pot
|EU funding 2014-20||CRF awards|
|Yorkshire & Humber||12.2||11.2|
The share of CRF awards going to the three northern regions – North East, North West and Yorkshire – is just 27 per cent, down from 41 per cent of EU funding. If this distribution of CRF funding were to be repeated in the allocation of UK SPF funding it would represent a major shift in resources to southern England and away from many of the places most in need of ‘levelling up’. To illustrate the point, the total value of CRF awards going to the whole of the North East (£7.7m) is less than the value of awards going to Devon (£11.3m).
What about the allocation to local areas?
In England, awards have been scattered widely across much of the country, with counties such as Devon, East Sussex, Essex, Herefordshire, Norfolk, Somerset and Worcestershire faring at least as well as more clearly disadvantaged parts of the country. In Wales, every local authority except Flintshire has successful bids. In Scotland, 22 out of 32 local authorities have successful bids
Has the government followed its own list of priority areas?
Broadly yes: 65 per cent of the funding for successful bids has gone to ‘priority areas’ identified back in March. But this isn’t entirely reassuring because the list included serious flaws and anomalies that were swiftly identified by local authorities and academic commentators.
Has the bidding and selection process been acceptable?
Definitely not. There is much about the Community Renewal Fund that has proved problematic.
- Competitive bidding for really quite small sums – the average successful bid is only worth around £500k
- An extremely tight timescale for delivery – all the spending has to be completed by 30 June 2022
- The long delay in government decision-making – decisions promised in July didn’t appear until November
- The flawed list of priority areas.
So does the CRF provide a good template for the UK SPF?
No. It is hard to believe that the really quite small CRF projects, carried out only for a few months, can offer much of a guide to a UK SPF that is likely to deploy billions. The most worrying development is the lack of a clear geographical focus to the successful CRF bids, especially in England, which represents a major divergence from the way in which EU Structural Funds were previously allocated to prioritise areas with lagging economies.
The centralised bidding simply hasn’t worked. It has overwhelmed civil servants with more detail than they have been able to handle – hence the massive over-run in the time taken for decision-making.
The immediate aim must be to avoid potentially damaging spill-over from the CRF to the UK Shared Prosperity Fund. UK-wide competitive bidding needs to be avoided, and there needs to be a much clearer focus on less prosperous economies if the UK SPF is to be a genuine successor to EU funding.